U.S. slaps new sanctions on Russian business, government leaders

Vladimir Putin, Sergei Chemezov

Alexei Druzhinin / Associated Press

Vladimir Putin, left, and Sergei Chemezov are pictured after signing a deal in Moscow in 2009. Chemezov, head of the technology and defense firm Rostec, is one of the Russians on a new U.S. sanctions list.

Vladimir Putin, left, and Sergei Chemezov are pictured after signing a deal in Moscow in 2009. Chemezov, head of the technology and defense firm Rostec, is one of the Russians on a new U.S. sanctions list. (Alexei Druzhinin / Associated Press)

Trying to drive a wedge between Vladimir Putin and the oligarchs who support him, the Obama administration slapped sanctions Monday on another two dozen Russian financiers, government officials and companies in an effort to pressure the Russian president to back down in Ukraine.

The new blacklist, the fourth since Russia took control of Ukraine's Crimean peninsula in March, stops short of trying to choke off major industries or vulnerable sectors of the Russian economy, including oil and gas exports, or financial institutions. No large banks or state-owned businesses are on the list.

CaptionCrisis in Ukraine

Sergei L. Loiko / Los Angeles Times

Separatist gunmen man one of the bases in front of the police station they captured this month in Slovyansk, Ukraine.

Separatist gunmen man one of the bases in front of the police station they captured this month in Slovyansk, Ukraine. (Sergei L. Loiko / Los Angeles Times)

Police officers in civilian clothes were allowed to collect their files and documents from the police station that had been overtaken by separatist gunmen in Slovyansk, Ukraine.

Police officers in civilian clothes were allowed to collect their files and documents from the police station that had been overtaken by separatist gunmen in Slovyansk, Ukraine. (Sergei L. Loiko / Los Angeles Times)

"These sanctions represent the next stage in a calibrated effort to change Russia's behavior," President Obama said during a news conference in Manila, where he is wrapping up a weeklong tour of Asia. "We don't yet know whether it's going to work.... But we are keeping in reserve additional steps that we could take should the situation escalate further."

The new U.S. list targets seven Russians, including two members of Putin's inner circle, for travel bans and asset freezes. It also includes 17 companies, including oil and infrastructure firms, with close ties to Putin, according to the White House.

The Commerce Department said it would deny or revoke export licenses held by several Russian companies that export high-tech defense equipment.

The European Union agreed to roll out related sanctions Tuesday, but will move more cautiously than Washington. The EU, which is much more closely tied than the U.S. to Russia's energy and industrial sectors, is expected to name 15 Russians and pro-Russia Ukrainian leaders, but not go after any companies.

The U.S. and Europe now have imposed sanctions on close to 100 Russians and Ukrainians, including several billionaires and business executives close to Putin, as well as several banks and companies.

Critics lambasted the list as insufficient to deter Putin. Some Republicans argued that the administration should go after more prominent Russian banks and companies, such as the energy giant Gazprom.

Sen. Kelly Ayotte (R-N.H.) described the sanctions as "tepid, incremental."

Cliff Kupchan, an analyst with the Eurasia Group risk-consulting firm, said the 17 companies targeted are not large enough to create much impact. "This won't hurt the Russian economy," he said.

U.S. and European officials have not agreed on how far to go, or how quickly. Some diplomats say that overly harsh sanctions could backfire, hurting European economies in particular, without changing Putin's course.

The White House had planned to roll out the latest sanctions after a fiery condemnation of Russia by Secretary of State John F. Kerry on Thursday evening. But they held back to give Europe more time.

~ SANCTIONED FROM APPROVAL OF SANCTIONERS ~ Welcome to US's silly sanctioning season, Hufflepuffins. Ukrainians are sanctioning Turch. and Yats., who stole their government and their sovereignty. Turch. and Yats. are sanctioning Ukrainians from their survival, drafting them into killing...

A senior U.S. official said the detention Friday of seven military observers from the Organization for Security and Cooperation in Europe, along with their German interpreter, strengthened Europe's willingness to penalize Moscow. Pro-Russia separatists have accused the Westerners of being NATO spies, and have freed only one, the observer from Sweden, which does not belong to the alliance.

White House officials say Russia's intervention in Ukraine already has cost its economy billions of dollars, and that sanctions are rattling Putin's "cronies." They cited a depreciation of the Russian currency, the ruble; increasing capital flight; and rising borrowing costs for a government that is heavily dependent on foreign capital.

Officials have not said whether they will target Putin's personal wealth, which is believed to be sizable but is difficult to track. Obama denied that was his aim.

"The goal here is not to go after Mr. Putin personally," he said in Manila. "The goal is to change his calculus. And to encourage him to actually walk the walk and not just talk the talk when it comes to diplomatically resolving the crisis in Ukraine."

Among those targeted was Igor Sechin, a former Russian deputy prime minister and now the president of Rosneft, a petroleum company that was not sanctioned.

Sergei Chemezov, head of a state-owned technology and defense firm known as Rostec, was also blacklisted, although Rostec was not. U.S. officials described Chemezov as a long-trusted Putin ally who has known the Russian leader since they lived in the same apartment complex in East Germany in the 1980s.

The blacklist includes two Russian banks, InvestCapitalBank and SMP Bank, both controlled by Arkady and Boris Rotenberg, who were sanctioned last month. The billionaire brothers are childhood friends of Putin.

Most of the remaining entities are interests associated with Gennady Timchenko, founder of a commodities trading firm. Timchenko was already sanctioned for assisting an unnamed "senior official of the government of the Russian Federation." Timchenko controls several rail, aviation, construction and other infrastructure companies.

Ukraine's worst unrest since the 1991 collapse of the Soviet Union was sparked by ousted President Viktor Yanukovich's decision to scrap a deal with the European Union in favor of closer ties with Russia.

Russian President Vladimir Putin said Wednesday that he had pulled back troops from the border with Ukraine and called on Kremlin-allied separatists to delay a referendum on whether Ukraine's regions should have a greater degree of autonomy.

At least 14 people were killed and scores were wounded as government forces seeking to win back this eastern Ukrainian city from pro-Russia separatists ran into an ambush Monday set up by the rebel gunmen.

A crowd of more than 2,000 pro-Russia separatists on Sunday night seized one of the last key official sites in the eastern Ukraine city of Donetsk still in the hands of the country’s interim government.

Armed clashes left scores of people dead in Ukraine on Friday, as President Obama and German Chancellor Angela Merkel vowed to impose stiffer economic sanctions on Russia if it disrupts Ukraine's upcoming election.